Walmart reported third quarter diluted earnings per share from continuing operations (EPS) of $0.97, compared to last year's $0.95 per share, which included a tax benefit of approximately $0.05 per share. The company's EPS was within its third quarter guidance of $0.95 to $1.00.
Net sales for the third quarter were $109.5 billion, an increase of 8.2 percent from last year.
Both Walmart U.S. and Sam's Club exceeded comparable ("comp") sales guidance for the quarter. Walmart U.S. comp sales increased 1.3 percent and Sam's Club comp sales, without fuel, increased 5.7 percent.
Walmart International increased net sales approximately 20 percent to $32.4 billion for the quarter, including the benefit from acquisitions and currency exchange translation.
The company, as well as the three operating segments, leveraged operating expenses for the quarter.
During the third quarter, the company returned $2.7 billion to shareholders through dividends and share repurchases.

BENTONVILLE, Ark., Nov 15, 2011 (BUSINESS WIRE) -- Wal-Mart Stores, Inc. (NYSE: WMT) today reported financial results for the third quarter ended Oct. 31, 2011. Net sales for the third quarter of fiscal year 2012 were $109.5 billion, an increase of 8.2 percent from $101.2 billion in net sales in last year's third quarter. Net sales for the quarter included $2.1 billion in sales from acquisitions in the U.K. and South Africa and a currency exchange translation benefit of $1.3 billion.

Income from continuing operations attributable to Walmart for the quarter was $3.3 billion. Diluted earnings per share from continuing operations attributable to Walmart (EPS) for the third quarter of fiscal year 2012 were $0.97. Last year's third quarter EPS of $0.95 included a $191-million tax benefit, which was approximately $0.05 per share, related to a favorable adjustment to transfer pricing policies after negotiations with a foreign tax jurisdiction.

Growth and leverage

"Every business segment is stronger today than it was a year ago, and we delivered solid earnings growth for our shareholders in the third quarter," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Both Walmart U.S. and Sam's Club exceeded comp sales guidance, and I'm pleased that the sales momentum positions us exceedingly well for the holidays. We also are pleased with the growth in both sales and operating income for Walmart International.

"The company leveraged operating expenses this quarter, with all three operating segments achieving that goal as well," Duke continued. "We are committed to leveraging expenses again this year. Our overall performance reflects Walmart's strategy of driving the productivity loop, reducing expenses and investing in price."

The economy continues to weigh on Walmart U.S. customers, and Duke said the stores are continuing a strategy of investing in low prices for the holidays.

"Beyond everyday low price, Walmart U.S. has a number of additional programs in place for the fourth quarter, including the Christmas price guarantee, holiday layaway services and free online shipping options," said Duke.

"Like the U.S., our international markets are ready for the upcoming holidays. We continue to see strong consumer demand in emerging markets, and our mission is relevant across all our formats around the world. EDLP is becoming an even stronger competitive advantage for us," Duke added.

Returns and free cash flow

"Walmart remains committed to delivering strong returns to our shareholders," said Charles Holley, Wal-Mart Stores, Inc. executive vice president and chief financial officer. "During the third quarter, we returned $2.7 billion to our shareholders through dividends and share repurchases, bringing our total year-to-date return to $8.8 billion."

In the third quarter, the company repurchased $1.4 billion worth of shares, representing approximately 27 million shares. In addition, the company paid $1.3 billion in dividends.

At the end of the third quarter, Walmart had positive free cash flow of $3.4 billion1, compared to $2.9 billion1 in the prior year. Return on investment (ROI) for the trailing 12 months ended Oct. 31, 2011 was 18.2 percent1, compared to 18.6 percent1 for the same period during the prior year. ROI was negatively impacted primarily by the acquisitions completed in the second quarter.

1 See additional information at the end of this release regarding non-GAAP financial measures.

EPS guidance
"Based on our views of the economic and sales environment in all our markets and our expectations for the holidays, we expect fourth quarter fiscal 2012 diluted earnings per share from continuing operations attributable to Walmart to range between $1.42 and $1.48," Holley said. "Last year, we reported EPS of $1.41 for the fourth quarter, which included a tax benefit of approximately $0.07 per share.

"Based on our year-to-date results and fourth quarter guidance, this implies a full year EPS from continuing operations range of $4.45 to $4.51. This compares to last year's full year EPS of $4.18, which included an approximate $0.11 per share benefit from certain tax items," said Holley. "Our guidance estimates assume that currency exchange rates remain at current levels and reflect our confidence in the business for the fourth quarter."